Regions Financial Corporation · NYSE:RF
Regions Financial — Q2 2014 Earnings Presentation
16 slides from Regions Financial's earnings presentation, Jul 22, 2014
Slide 1: 2nd Quarter 2014 Earnings Conference Call
2nd Quarter 2014 Earnings o Conference Call July 22, 2014 Exhibit 99.3
Slide 2: Steady progress
Steady progress 2 (1) Non-GAAP; see appendix for reconciliation *Annualized Revenue Adjusted efficiency ratio(1) Loans Low-cost deposits Dividend Net charge-offs as % of average loans* Improved 270 bps Increased 1.1% Increased 1% Increased to $0.05 Increased 2% 2Q14 • Net income available to common
Slide 3: Loans
Loans • Business lending portfolio up 1%; production up 22% • Commercial & Industrial loans up 3% QoQ • Commercial line utilization increased 30 basis points QoQ and commitments for new loans increased 3% or $1 billion • Consumer lending portfolio up 1%; production up 22% • Indirect auto loans and p
Slide 4: Deposits and funding costs
4 Deposits and funding costs 81,657 82,255 82,777 84,174 84,871 10,797 10,066 9,676 9,219 8,951 $92,454 $92,321 $92,453 $93,393 $93,822 2Q13 3Q13 4Q13 1Q14 2Q14 Low-Cost Deposits Time Deposits + Other Ending Deposit Balances ($ in millions) 40 bps 35 bps 34 bps 33 bps 31 bps 2Q13 3Q13 4Q13 1Q14 2Q14
Slide 5: Net interest income and net interest margin
Net interest income and net interest margin • Net interest income (FTE) increased $6 million from prior quarter, while net interest margin declined 2 basis points • Net interest income positively impacted by loan growth • Improvement offset by lower asset yields and loan spread compression • Remain
Slide 6: Non-interest revenue
Non-interest revenue • Non-interest revenue grew $19 million, or 4% from 1Q • Service charges increased 1%, aided by increases in checking accounts in first half of the year • Card and ATM fees increased 6%, driven by increased debit card transaction volume, sales of new credit cards and spending in
Slide 7: Expenses
Expenses • Adjusted non-interest expenses(1) declined 2% from 1Q • Salaries and benefits declined 3%, related to seasonal payroll taxes in 1Q and lower headcount • Deposit administrative fees declined $9 million, primarily related to a refund from previously incurred fees • Continue to expect full y
Slide 8: Asset quality
Asset quality Net charge-offs and ratio ($ in millions) NPLs and coverage ratio(3) ($ in millions) Criticized and classified loans(4) ($ in millions) Troubled debt restructurings ($ in millions) 151 $144 $114 $278 $82 $67 0.77% 0.60% 0.67% 0.44% 0.35% 2Q13 3Q13 4Q13 1Q14 2Q14 Net Charge-Offs related
Slide 9: Capital and liquidity
Capital and liquidity Tier 1 capital ratio(1) Loan to deposit ratio(3) Tier 1 common ratio(1)(2) (1) Current quarter ratios are estimated (2) See GAAP to non-GAAP reconciliation in appendix (3) Based on ending balances 11.6% 11.5% 11.7% 11.8% 12.5% 2Q13 3Q13 4Q13 1Q14 2Q14 11.1% 11.0% 11.2% 11.4% 11
Slide 10: Appendix
Appendix Ms REGIONS 10
Slide 11: Non-GAAP reconciliation: Non-interest expense and efficiency/fee income ratios
Non-GAAP reconciliation: Non-interest expense and efficiency/fee income ratios The table below presents computations of the efficiency ratio (non-GAAP), which is a measure of productivity, generally calculated as non-interest expense divided by total revenue. The table also shows the fee income rati
Slide 12: Non-GAAP reconciliation: Net charge-off ratio
Non-GAAP reconciliation: Net charge-off ratio Select calculations for annualized net charge-offs as a percentage of average loans (GAAP) are presented in the table below. During the fourth quarter of 2013, Regions made the strategic decision to transfer certain primarily accruing restructured reside
Slide 13: Non-GAAP reconciliation: Tier 1 common
Non-GAAP reconciliation: Tier 1 common The following table provides calculations of Tier 1 capital (regulatory) and "Tier 1 common equity" (non-GAAP). Traditionally, the Federal Reserve and other banking regulatory bodies have assessed a bank's capital adequacy based on Tier 1 capital, the calculati
Slide 14: Non-GAAP reconciliation: Basel III common equity Tier 1
Non-GAAP reconciliation: Basel III common equity Tier 1 The following table provides calculations of “common equity Tier 1" (CET1) (non-GAAP), based on Regions’ current understanding of the Final Basel III requirements. In December 2010, the Basel Committee on Banking Supervision (the “Basel Committ
Slide 15: Forward-looking statements
Forward-looking statements The foregoing list of factors is not exhaustive. For discussion of these and other factors that may cause actual results to differ from expectations, look under the captions “Forward-Looking Statements” and “Risk Factors" of Regions' Annual Report on Form 10-K for the year
Slide 16: A. REGIONS
A. REGIONS